Sarafu-Credit (sarafu is the

Kiswahili Swahili, also known by its local name , is the native language of the Swahili people, who are found primarily in Tanzania, Kenya and Mozambique (along the East African coast and adjacent litoral islands). It is a Bantu language, though Swahili ...

word for 'currency') is a

community currency A community is a social unit (a group of living things) with commonality such as place, norms, religion, values, customs, or identity. Communities may share a sense of place situated in a given geographical area (e.g. a country, village, town ...

system operated in

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. It is used by five different communities, all located in

informal settlements Informal housing or informal settlement can include any form of housing, shelter, or settlement (or lack thereof) which is illegal, falls outside of government control or regulation, or is not afforded protection by the state. As such, the inform ...

slum A slum is a highly populated urban residential area consisting of densely packed housing units of weak build quality and often associated with poverty. The infrastructure in slums is often deteriorated or incomplete, and they are primarily inh ...

areas, including small businesses and schools. The community currency system takes the form of paper notes, circulating alongside the national currency, the

Kenyan shilling The shilling ( sw, shilingi; abbreviation: KSh; ISO code: KES) is the currency of Kenya. It is divided into 100 cents. Notation Prices in the Kenyan shilling are written in the form of , where x is the amount in shillings, while y is the ...

. It aims at fostering local trade by mobilizing under-used resources, and at satisfying basic needs (such as accessing food and paying school fees) by allowing users to trade even when the national currency is scarce. The adoption of the community currency has generated an average 22% increase in participating businesses' incomes.Ruddick, W.O., Richards, M.A. & Bendell, J., 2015
Complementary Currencies for Sustainable Development in Kenya: The Case of the Bangla-Pesa
''International Journal of Community Currency Research'', 19. In using communities, up to 10% of local food purchases are being done using the community currency. Field studies have also shown that Sarafu-Credit usage is positively correlated to increasing levels of trust among community members. Such monetary innovation is designed to go beyond

official development assistance Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...

, by considering the nature of money or credit and alternatives way it can be created. The Sarafu-Credit system has been developed and is implemented by a Kenyan-based non-profit foundation called Grassroots Economics.

History

The first complementary currency introduced in Kenya was the Eco-Pesa, founded by Will Ruddick. The complementary currency in Kongowea,

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, was in circulation between August 2009 and November 2010, as part of a donor-funded environmental project. Instead of directly spending the donor funds, the complementary currency allowed to realize the projects' objectives as well as boosting the local economy. Beside the collection of 20 tonnes of waste and the creation of three youth-led community tree nurseries, the use of Eco-Pesa resulted in a 22% average increase in participating businesses' incomes. After the success of the project, it was followed by Bangla-Pesa in 2013. Will Ruddick, Caroline Dama and four other program members were falsely accused of undermining the Kenyan schilling and all charges were dropped after investigations and a petition was signed by 200 Academics at the Hague to support the program.

Local groups

In 2017, six communities are currently using Sarafu-Credit in Kenya totaling over 1200 users. The system is the same in all of them, though each community uses its own version of Sarafu-Credit, giving it a unique name depending on the local

toponyms Toponymy, toponymics, or toponomastics is the study of ''toponyms'' (proper names of places, also known as place names and geographic names), including their origins, meanings, usage and types. Toponym is the general term for a proper name of ...

, and managing it independently. In South-Africa, two community currencies have taken inspiration from the Sarafu-Credit model and were consulted by Grassroots Economics Foundation: the K'Mali and the Berg-Rand.

Sarafu (Currency) Model

History

Local groups

Sarafu (Currency) Model

Asset Development Phase

Community Currency

Local Asset Ownership and Regional Markets

References